Report: Microsoft's Xbox division has lost nearly $3 billion in 10 years

Even as rumors have begun about the possible 2013 launch of the successors to the Xbox 360 and the Playstation 3, there's lots of talk that these products could the final game consoles ever made. Today, a game developer claims that Microsoft and Sony have already lots a ton of money on the current generation of game consoles.

Ben Cousins, a game developer who has worked at EA, Sony and other studios, currently works at Scattered Entertainment, which is making a first person shooter for the iOS platform. In a Kotaku article, he states that game consoles are sold at a loss so companies such as Microsoft can get the money back via license fees from each game that are sold on their systems.  He shows, via Microsoft's own financial numbers. that the Xbox division has lost close to $3 billion in the last 10 fiscal years. Sony's gaming division lost even more money in the same time period, with a lost of almost $5 billion. Those number do include costs such as research and development, hardware production, marketing and PR and more which makes his personal view skewed.

Cousins also says that of the 70 million Xbox 360 consoles sold since 2006, about 40 percent were bought since its last major price cut in 2009. He believes that indicates the people who bought the consoles at that time were looking for something that offered the best combination of price and performance and calls that group "mainstream gamers".

He believes that as smartphones and tablets become more powerful, game publishers will start to target the large group of mainstream gamers for those kinds of games ahead of console titles. He adds:

Without this huge group of people buying consoles or console games, the console platform holders will no longer be able to make enough money to justify developing, marketing and manufacturing the devices.

He adds that it's possible that hardcore gamers who can't see themselves playing games on a mobile device could move to playing games on a PC.

Some people might dispute his views on game consoles now that Cousins is a iOS game developer but he defends his position, pointing to his previous console game experience. He adds, "The reason I moved to mobile a year and a half ago is precisely because I came to the conclusion the consoles were on their way out. I bet my career on it. That's how much I believe in it..."

Source: Kotaku | Image via Ben Cousins

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